BOV announces a revision of its interest rates, folllowing the ECB cut

Following the interest rate cut announced recently by the European Central Bank, and in the context of the prevailing interest rate scenario, Bank of Valletta has announced a revision of its interest rates as follows:

With effect from Monday, the 18th of November 2013, the Bank’s Base Rate for Business Lending will reduce by 15 basis points (bp) from 2.45% to 2.30%.

The Base Rate for the Manufacturing sector will also go down to 2.30%, a decrease of 5 bp from the current rate of 2.35%.

The Base Rates for Consumer Lending and Home Loans will, for the time being, remain at the current levels.

With effect from Monday, the 18th of November 2013, interest rates paid on Term Deposits over 12 months will increase up to a maximum of 50 bp. The rate offered on the 1 Year Term will, for the time being, remain at the current level of 2%.

With effect from Monday, the 20th of January 2014, interest rates on all deposits at call or with a maturity of 6 months or less will decrease by 10 bp.

The Bank said that its objective in this revision exercise is to lower interest costs for its borrowing customers without unduly penalising depositors. “The rate cut of 15 bp on Business Lending is higher than the reduction in the interest rate on short term deposits. While interest rates on short term deposits have been lowered by 10 bp, the rates offered on the longer terms have been increased by up to 50 bp.”

“The Bank manages both sides of its balance sheet in a constantly changing environment. It seeks to strike the right balance between the interests of all stakeholders, be they shareholders, borrowers or depositors,” stated BOV Chairman John Cassar White. “The aim of this revision exercise is to stimulate economic activity by reducing the burden of borrowing costs, while continuing to encourage savings, which, in the long term, are the basis of sustainable economic growth.”